NCUA Unveils New Member Business Lending Video

NCUA released a new resource that helps credit unions to learn more about member business lending in the wake of new rule changes.

A video, released Monday, outlines the elements of an effective members business lending program and highlights how correctly-managed members business lending could benefit credit unions, their members and communities, according to the regulator agency's news release about the new resource.

Under a member business lending interim final rule, which the NCUA's board of directors approved at their opening meeting in February, credit unions will have greater latitude to make commercial lending decisions.

The final rule permits credit unions to tailor their member business lending program to fit their strategic goals and the needs of their members, according to NCUA.

Key changes in the final rule include the ability of credit union loan officers to not require a personal guarantee under certain circumstances, lifting limits on construction and development loans, and replacing explicit loan-to-value limits with the principle of appropriate collateral and eliminating the need for a waiver.

Among other important changes are exemption of credit unions with assets under $250 million and small commercial loan portfolios from certain requirements, and affirming that non-member loan participations do not count against the statutory MBL cap.

While a majority of the provisions of the final rule will become effective Jan. 1, 2017, removal of the personal guarantee requirement is effective 60 days after the March 14 publication in the Federal Register.